Navigating green futures: the role of the political-firm bridge in corporate green innovation

We examine the effect of the political-firm bridge on corporate green innovation. Exploiting the 2015 Chinese reform that requires the Committee Party Secretary to concurrently serve as the Chairman of state-owned enterprises (SOEs) as a quasi-natural experiment, we employ a staggered difference-in-differences (DID) methodology. Drawing on data from 399 A-share listed SOEs from 2010 to 2019, the empirical investigation demonstrates that a stronger political-firm bridge improves corporate green innovation. We further leverage propensity score matching and placebo tests to strengthen identification. Moreover, environmental regulation and political promotion are two plausible mechanisms underlying our results. Collectively, we shed light on the interplay between the government and business in fostering sustainable growth.